Siteraze Ltd is a company which engages in site clearance and site preparation work. Information concerningits operations is as follows:(a) It is company policy to hire all plant and machinery required for the implementation of all ordersobtained, rather than to purchase its own plant and machinery.(b) Siteraze Ltd will enter into an advance hire agreement contract for the coming year at one of three levels– high, medium or low, which correspond to the requirements of a high, medium or low level of ordersobtained.(c) The level of orders obtained will not be known when the advance hire agreement contract is entered into.A set of probabilities have been estimated by management as to the likelihood of the orders being athigh, medium or low level.(d) Where the advance hire agreement entered into is lower than that required for the level of orders actuallyobtained, a premium rate must be paid to obtain additional plant and machinery required.(e) No refund is obtainable where the advance hire agreement for plant and machinery is at a level in excessof that required to satisfy the site clearance and preparation orders actually obtained.A summary of the information relating to the above points is as follows:Plant and machinery hire costsLevel of orders Revenue£000Probability Advance hire£000Conversionpremium£000High 15,000 0.25 2,300Medium 8,500 0.45 1,500Low 4,000 0.30 1,000Low to medium 850Medium to high 1,300Low to high 2,150Variable cost (as a percentage of turnover) 70%Required:(a) Prepare a summary which shows the forecast net margin earned by Siteraze Ltd for the coming year foreach possible outcome.(b) On the basis of maximising expected value, calculate for Siteraze whether the advance contract for thehire of plant and machinery should be at the low, medium or high level.(c) Explain how the risk preferences of the management members responsible for the choice of advanceplant and machinery hire contract may alter the decision reached in (b) above.(d) Siteraze Ltd are considering employing a market research consultant who will be able to say withcertainty in advance of the placing of the plant and machinery hire contract, which level of site clearanceand preparation orders will be obtained. On the basis of expected value, calculate the maximum sumwhich Siteraze Ltd should be willing to pay the consultant for this information.